Bitcoin’s Bumpy Ride: Rate Cut Spark, Liquidation Surge, and the Hunt for Support

The U.S. Federal Reserve’s decision to cut interest rates by 25 basis points on September 17, 2025, has sparked renewed momentum in the cryptocurrency market, particularly for Bitcoin (BTC). The rate cut, marking the first reduction since December 2024, has been widely interpreted as a dovish pivot that could ease financial conditions and weaken the U.S. dollar, both of which are historically favorable for risk-on assets like Bitcoin. However, the market’s initial reaction was mixed, with Bitcoin dropping 4.6% to $101,300 following Federal Reserve Chair Jerome Powell’s press conference, where he signaled that only two more rate cuts are expected in 2025 and raised the inflation forecast from 2.1% to 2.5% . This hawkish undertone, attributed to concerns over inflation and the potential economic impact of the incoming Trump administration’s policies, tempered immediate bullish expectations .

Despite the short-term volatility, the broader macroeconomic environment remains supportive for Bitcoin. The rate cut has intensified speculation that further reductions may follow, which could boost liquidity and investor appetite for alternative assets. Analysts from platforms like Skew have noted that the price drop has triggered both long and short liquidations, with over $177 million in long positions and $83 million in short positions liquidated in the 24 hours following the announcement . The market is now closely monitoring the path of the Fed’s monetary policy and its impact on Bitcoin’s price, with many investors betting on a potential recovery and a test of the $100,000 to $101,400 support zone .

In parallel, the Bitcoin Hyper (HYPER) Layer-2 solution has gained significant attention as a potential catalyst for Bitcoin’s scalability and adoption. With a presale that has raised over $9.7 million as of September 17, Bitcoin Hyper aims to address Bitcoin’s limitations in transaction speed, cost, and smart contract functionality by batching transactions off-chain and integrating with the Solana Virtual Machine (SVM) . The project has attracted substantial interest from investors, particularly given the backdrop of rising institutional demand for Bitcoin and the regulatory developments favoring crypto adoption in the U.S. . Bitcoin Hyper’s presale momentum has been further fueled by the anticipation of the Fed’s rate cuts and the expectation of increased demand for Bitcoin as a store of value and a vehicle for innovation .

The broader crypto market has also seen significant activity linked to the Fed’s decision. Stablecoin inflows to major exchanges, including Binance, have surged, suggesting that institutional and sophisticated investors are positioning for a potential market rebound. The stablecoin inflows, totaling around $2 billion ahead of the Fed announcement, could indicate a buildup of liquidity that may support a new wave of buying pressure in the coming weeks . Meanwhile, Bitcoin’s dominance has shown signs of declining, which some analysts interpret as a precursor to a potential altcoin season, where smaller cryptocurrencies may outperform Bitcoin as the broader market adjusts to the new monetary policy regime .

Looking ahead, the key focus for the crypto market will be on the Fed’s next steps and how they align with the economic outlook shaped by factors such as global trade tensions and potential fiscal policy changes. While the initial response to the rate cut was bearish, the long-term trajectory for Bitcoin and the wider market remains contingent on whether the Fed continues its accommodative stance. Analysts have highlighted that Bitcoin’s ability to reclaim key price levels, particularly the $100,000 to $101,400 range, will be a crucial barometer of investor sentiment and market resilience in the coming weeks . In the meantime, innovations like Bitcoin Hyper are positioning themselves to capitalize on the anticipated growth in Bitcoin’s usage and infrastructure, offering a scalable and secure solution for a rapidly evolving digital asset ecosystem .